(This page tries to bring out consolidated opinion, IPO Analysis , IPO Note/ reports and recommendation of brokerages , Analysts, Business New papers, Management views etc on Varun Beverages IPO and shall be updated continuously till the closure of IPO. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Varun Beverages IPO)
Contrary to PNB Housing Finance, Varun Beverages IPO has been maintaining a very low profile. As on 24/10/16, very low activity has been reported in Grey market as well.
|Subscription: Varun Beverages IPO ( x times)|
Anchor List : Varun Beverages, today raised over Rs 327 crore by allotting shares to anchor investors, a day ahead of its initial public offering opens for subscription. The shares were alloted at Rs 445 ,. Among the anchor investors are Abu Dhabi Investment Authority, Merrill Lynch, Morgan Stanley and Small Cap World Fund
Compete Anchor List Click Here to view
Views of Brokerages, Analysts, Business New Papers, Management views
Economic Times: Should you invest in Varun Beverages IPO?
HEM Securities: “At price band of Rs 440-445,p/e multiple will turn out to be 84-85 on pre issue CY’15 eps of Rs 5.21/share (post conversion) of company. Due to unstable financials & seasonal nature of business, co is not expected to show strength in its financial performance. Also, pricing of issue looks expensive at current level. Hence, recommend “Avoid” on issue.“
Reliance Securities: “Valuations are stretched, even after considering performance in first half of 2016 and factoring debt repayment. It says that while there are no listed peers in India, there are several bottlers listed overseas, which trade at significant discount to these multiples . Based on reported profit of Rs 87 crore in 2015, the stock would trade at price to equity ratio of 93x CY15 earnings at upper end of the price band, while EV/EBITDA multiple stands at 14.9x.”
Way2Wealth ” Feels theissue is expensive. At the offer price band of Rs 440-445 per share the issue is available at price to equity of 60-65x its 2016 earnings per share (EPS), valuing the stock at 12.3-13x EV/EBITDA. Though we believe the beverage market in India is just heating up, especially in the non-carbonated drinks space, risk-return trade-off for the IPO investors doesn’t seem to leave much value on the table post-listing“
Choice Brokerage: “At the higher price band of Rs 445, Varun Beverage share is valued at a P/E multiple of 62.5 times. Hence the rating assigned is Avoid“
Hindu Business Line: “High valuation, shaky financials and lack of triggers for any value addition or expansion in margins, make the initial public offer of Varun Beverages, unattractive.”
ICICI Direct: Varun beverage is available at 15.2x EV/EBITDA for CY15 at the upper end of the price band of | 440-445. Leveraging the strong brand name of PepsiCo and strong growth outlook of carbonates and juice segments which are estimated to grow at a volume CAGR of 7.8% and 21.5% in 2015-2020E respectively, we believe Varun has a strong opportunity for growing volume sales. We believe Varun is available at fair valuations considering the market growth opportunity and strong brand name associated with it. We recommend SUBSCRIBE on the IPO
SP Tulsiyan Brokerage: “Due to lack of comfort on the business model, this IPO can be given a miss!”
Angel Broking: ” On CY2015’s PAT of `87cr, the issue, at its upper band is priced at the P/E ratio of 85.4x which looks expensive. The issue still looks expensive at P/E of 51.4x, calculated on estimated CY2016E PAT of `157cr. We note that a lot of MNC brands have presence in India through franchisees. Few of these franchisees have been able to grow their business by taking strategic decisions such product launches, advertising etc. which is not the case with VBL . Considering its inconsistent financial performance, low RoE, asset heavy business model and high valuation, we rate this IPO as ‘Neutral’ “